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Tag Archives | Stock Market

What’s the old saying, those who don’t learn from history are doomed to repeat it? Well take a look at this chart and read what Mark Hulbert has to say about it at MarketWatch; do you think it’s going to be 1929 all over again?

Chart from MarketWatch

There are eerie parallels between the stock market’s recent behavior and how it behaved right before the 1929 crash.

That at least is the conclusion reached by a frightening chart that has been making the rounds on Wall Street. The chart superimposes the market’s recent performance on top of a plot of its gyrations in 1928 and 1929.

The picture isn’t pretty. And it’s not as easy as you might think to wriggle out from underneath the bearish significance of this chart.

The Telegraph claims that a surprising number of mainstream investment bankers make decisions based on astrology. Can you envision this growing into a quasi-religious cult?

Donald Bradley’s method of foreseeing changes in the market involved assigning a numerical value to the position of the planets and stars and plotting the values on a graph. The peaks and troughs of that line should, in theory, plot “turns” in the fortunes of stocks, bonds and commodities. It sounds utterly mad, but the model has been described by market watcher Peter Eliades as “eerily accurate”.

I wanted to do a statistical analysis of his method and use it if it worked,” says Crawford. Back in the library, Crawford found records of the Dow Jones going back to 1885 and a book outlining the details of planetary positions. After comparing the two, he was impressed.

So Crawford began using astrology alongside his technical analysis. Over the years, Crawford found his predictions working out so well that, in 1977, he set up business as a full-time astrological adviser.

Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore.

For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them.

So why not let everyone participate? Under my plan, each American household could borrow $10 million from the Fed at zero interest.

Within hours this summer, 30 American troops died in a strike in Afghanistan and millions of American investors watched the Dow Jones Average shed an astonishing 634 points in one day. While it might be difficult to find similarities in the two events, social psychologists can detect a common theme: In each case, investments (money and human lives) were made, and those resources were painfully lost.

The ‘sunk-cost’ effect: Untold Americans experienced what is called the “sunk-cost” effect: Less a cognitive thought than an emotional one, this effect is the feeling that they are being wasteful if they terminate a prior commitment. Thus, they pondered: Stay the course and “waste not, want not”; or “cut and run.”

Such a piercing event as suffering the greatest loss of American troops in the nearly 10-year-old war might seem to serve as a catalyst for people to denounce the war and demand a way out.

In need of a pick-me-up? The Tumblr Brokers With Hands On Their Faces offers an unending stream of more-pleasing-than-lolcats shots of Wall Street brokers smooshing and contorting their faces in their hands as they "find out the latest numbers" or some such. I like to think that they just realized that money is an imaginary social construct and can scarcely believe what fools they've been.
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When the language used by financial analysts and reporters becomes increasingly similar the stock market may be overheated, say scientists.

After examining 18,000 online articles published by the Financial Times, The New York Times, and the BBC, computer scientists have discovered that the verbs and nouns used by financial commentators converge in a ‘herd-like’ fashion in the lead up to a stock market bubble. Immediately afterwards, the language disperses.

The findings presented at the International Joint Conference on Artificial Intelligence, Barcelona, Spain, on July 19, 2011, show that the trends in the use of words by financial journalists correlate closely with changes in the leading stock indices.

“Our analysis shows that trends in the use of words by financial journalists correlate closely with changes in the leading stock indices — the DJI, the NIKKEI-225, and FTSE-100,” says Professor Mark Keane, Chair of Computer Science in University College Dublin, who was involved in the research.

Well, this is predictable …Today members of Congress had to reveal their stock holdings. We were curious what anti-Fed, pro-gold Congressman Ron Paul held, and no surprise, he likes gold. Lots of it. Here are the stocks he owns:

When the current financial crisis hit, the failure of traditional economic doctrines to provide any sort of early warning shocked not only financial experts worldwide, but also governments and the general public, and we all began to question the effectiveness and validity of those doctrines.A research team based in Israel decided to investigate what went awry, searching for order in an apparently random system. They report their findings in the American Institute of Physics’ journal AIP Advances.

The novelty of their study is the incorporation of time variation of “human factors” into mathematical analysis. The team, led by Dr. Yoash Shapira, former head of the Atomic Energy Commission Research and currently a guest scientist at Tel Aviv University, along with Eshel Ben-Jacob, a professor of physics, Tel Aviv University School of Physics and Astronomy, and his doctoral student Dror Y. Kenett, hypothesized that temporal order (arrangement of events in time) should be hidden in variables associated with fear, such as volatility.